21 February 2013 19:57 [Source: ICIS news]
WASHINGTON (ICIS)--The US economy is likely to experience slow but continued expansion during the first half of this year, a key survey said on Thursday, with the recovering housing industry playing a major positive role.
That January advance followed a 0.5-index point gain in December and no change in November.
The LEI represents a cumulative measure of 10 different business and economic gauges such as manufacturers’ new orders, residential building permits, interest rates and consumer sentiment, among others.
The current index is measured against the baseline level of 100 set in 2004, before the 2008-2009 US recession.
The January advance “points to a slow but continued expansion in economic activity in the near term,” said Conference Board economist Ataman Ozyldirim.
“Despite continued weakness in manufacturers’ new orders and consumer expectations, improvement in housing permits and financial components helped boost the LEI in January,” he said.
Ken Goldstein, also a board economist, said that the January indicators “point to an underlying economy that remains relatively sound but sluggish”.
“Credit use has picked up, driven in part by relatively strong demand for auto loans,” Goldstein said, adding: “But the biggest positive factor is housing.”
“The housing market is now at twice the level reached during its recessionary lows,” he said, “and will likely continue to improve through the spring, delivering some growth momentum to the labour market and the overall economy.”
However, Goldstein said, that steady but sluggish economic growth could be threatened if looming cuts in federal spending take effect in weeks ahead.
The White House and Congress are struggling to find a way to avert automatic federal budget cuts of some $85bn (€64bn) set to take effect beginning 1 March.
($1 = €0.75)
Paul Hodges studies key influences shaping the chemical industry in Chemicals and the Economy
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